A reader brings a bizarre leaked e-mail to my attention:
date: Mon, 18 May 1998 10:00:38 +010 ???
from: Trevor Davies ???@uea.ac.uk
subject: goldman-sachs
to: ???@uea,???@uea,???@ueaJean,
We (Mike H) have done a modest amount of work on degree-days for G-S. They
now want to extend this. They are involved in dealing in the developing
energy futures market.G-S is the sort of company that we might be looking for a ”strategic
alliance” with. I suggest the four of us meet with ?? (forgotten his name)
for an hour on the afternoon of Friday 12 June (best guess for Phil & Jean
– he needs a date from us). Thanks.Trevor
++++++++++++++++++++++++++
Professor Trevor D. Davies
Climatic Research Unit
University of East Anglia
Norwich NR4 7TJ
United KingdomTel. +44 ???
Fax. +44 ???
++++++++++++++++++++++++++
Now, I don’t really have any problem with the idea that a highly active and productive species like human beings can heavily influence our climate. In fact, I think there is a good deal of circumstantial evidence to suggest that we have been doing it for millennia.
From the Economist:
The ice-core record shows that the level of carbon dioxide in the atmosphere made an anomalous upturn about 7,000 years ago, and that methane levels, which were also falling, began to increase about 5,000 years ago. These numbers correspond well with the rise of farming in Europe and Asia.
The implication is that this small uptick in greenhouse gases has warmed the Earth, staving off new glaciation and thereby creating conditions beneficial to the development of modern civilisation.
So my real problem is with the view that somehow humanity can accurately predict future climactic trends via simulations and models. The idea that economies are simply too complex to accurately model applies even more to climates, which are vastly more complicated systems. Nonetheless, human activity seems to have caused atmospheric changes:
While we can’t reliably predict what the precise results of this will be, keeping global greenhouse gas levels close to the pre-industrial ones seems to be a good insurance policy.
Imposing emissions limitations using carbon credits which can then be traded on exchanges is no such thing. Why?
- It does not address atmospheric greenhouse gas levels; it merely affects emissions. Stabilising greenhouse gas levels requires removing gases from the atmosphere, either through traditional means like planting new forests, or through exotic technologies like carbon-scrubbing.
- It creates systemic financial fragility; imposing an artificial cap on emissions in an economy which is still heavily-carbon based will in all-likelihood lead to some form of carbon derivatives bubble. A widespread transition to alternative energy — supposedly, what is to be encouraged — would reduce the value of carbon credits, which would mean big losses for speculators. It is entirely plausible that this could lead to bank failures.
If the influential climate scientists at CRU were looking for a strategic alliance with Goldman Sachs, they were barking up the wrong tree in creating an effective insurance policy. If they were looking to enjoy the fruits of the global derivatives ponzi, then Goldman Sachs were precisely the right people.
In reality, US foreign policy — with its deep focus on keeping the global energy trade flowing — acts as an implicit multi-trillion dollar subsidy on keeping oil and hydrocarbons cheap. This is an artificial disincentive against the development of decentralised alternative energy infrastructure (solar, thorium, synthetic oil, carbon scrubbing, etc). Climate scientists who want to see real change would do better to focus on decreasing this market distortion, rather than creating more market distortion through carbon trading.
azizonomics 
The problem is fractional reserve banking and usury….which creates a consumerist society while expanding credit and indebtedness. This obviously creates imbalance in nature. To allow nature to regain its balance, human beings also have to get back to living within natural moral limits, this means we need to rejects usury, fractional reserve banking and consumerism. Consumerism means buying things that we do not really need, because we feel empty the marketeers get us to get into debt, work long hard stressful hours and to spend on things to gain some temporary pleasure, until the next cycle. We are consumed.
http://truthsquad.tv/?p=1017
Good analysis at the above link, however I do not agree with the idea that free markets will operate perfectly without any regulation by government.
I don’t want zero regulation… the problem is that a lot of government regulation — rather than creating stability — is just market rigging, which creates fragility.
The kind of regulation I’d like to see more of is: putting thieving banksters in jail, putting derivatives on transparent exchanges, banning or heavily regulating algorithmic trading, banning naked short selling (especially of commodities like silver and gold), and most importantly (my Austrian friends will strongly disagree with this as they believe it will lead to mainvestment) helping poor young people develop business strategies and get access to capital.
What I want to contrast regulation (i.e. helping the market work) against is managerialism (managing the market), e.g. monetary management of the business cycle, central planning, etc, etc.
Mangerialism is almost always a disaster.
Free markets? You mean the one where interest rates were kept artificially low for years, creating a debt bubble and consumerism as a result of cheap and easy credit? Let the market decide interest rates, and watch consumerism change to austerity real quick.
Free markets can’t be the cause if they don’t exist.
I agree!
I could not agree more, Aziz. Markets, at least in the real world, are not perfect, and regulation, proper regulation, aims to correct market failures, not replace markets. Well regulated capitalism seems to produce the most good for the most people. It’s unfortunate that we have so seldom seen that happy state of affairs.
How can we have a good fair balanced society? Do we just leave things alone to sort themselves out, or do we allow one or more groups to make laws and control society? Both advocates exist, the free marketeers and the regulators. The regulators have had ago and created chaos and an elite power. The free marketeers I find scary, can we really just allow markets to self regulate and organize? In theory yes, in actual reality we do not know, our imaginations can run wild assuming a wild west type society, where gangsters with guns rule and own everything, not much different from the situation in the regulatory state we are in now. Maybe we can have Aristocratic and monarchic government, it was never as bad as the French Revolution propaganda of the bankers would suggest.
I think there is a difference between managerialism (which what we have now) vs regulation (which is what I support).
Managerialism is a form of central planning where the state’s purpose is to control, manage X, Y and Z, e.g. markets, the business cycle, the internet, etc. Regulation is not a form of central planning: it’s about making sure we have a level playing field, rule of law, transparency, and defending individual liberty.
Well said as usual, Aziz. However, OPEC strive to keep price stability below a certain threshold as at about $120 barrel, it becomes cheaper to convert coal to oil (sorry, i cant find the reference). Of course it did get over that, but not long enough to become structural.
Besides, there may be a new kid on the block, with a profound discovery about the nature of oil. “Fossils From Animals And Plants Are Not Necessary For Crude Oil And Natural Gas, Swedish Researchers Find”
http://www.sciencedaily.com/releases/2009/09/090910084259.htm .
Sorry about my links. I’m using my iPhone.
In any case, we only need to make cold fusion a reality for fossil fuels to become a mere footnote in history.
If a certain amount of poison kills you, then it can safely assume that a smaller amount of poison will make you sick, and a smaller amount will probably ruin your liver.
Lets give full blown Communism a try, and if it does not work, abolish and ban it forever and then let the Austrians (Liberal Free Markets) have a go.
I have a strange feeling that Socialism has ruined our economy, and corporate social welfare (TARP, QE) done even more damage.
I don’t believe in Global warming. The Carbon was in the air during the time of the Dinosaurs, and they were big healthy animals. The fish were huge!
Carbon taxes are just a way for politicians to tax our living costs (Heating, Electricty and transport) because Capital Gains, Sales, VAT and Income Taxes will be soft for a long long time.
Russia and China tried communism so other countries did not have to…
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Australia has recently passed a Carbon Trading System (Note the current government was elected on the platform that there would not be a carbon tax, however in order to win the election they had to form an alliance with the Greens who wanted the legislation passed)
Note the website promoting Green Money
http://findgreenmoney.com.au/by-lga/271/victoria-macedon-ranges
How much of these programmes, consume recources in the administration and promotion? Many. Plus the cost to business applying for them (I have had to find free Government Money at the bequest of my employers)
I am a Climate Change skeptic. I do feel we have used science in a way that has skewed our understanding. I feel that it is a natural cycle.